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Government pushing GST to meet April, 2016 deadline

Even
though Parliament’s Monsoon Session could not turn into success,
the Indian Government did not step-back and has been significantly
working towards the success of Goods and Services Tax (“GST”)
to be able to meet the April, 2016 deadline. The Government has
pressed the pedal on the much needed administrative groundwork for
rolling out the ambitious Indirect tax reform on time.

IT Infrastructure

As
per the Revenue Minister, the IT Infrastructure for GST
implementation is being kept ready, so that as soon as the
legislation gets approved, the revenue department will be in a
position to take the necessary follow-up actions in terms of ordinary
legislations and executive actions required for its support.

It
also plans to use Large Taxpayers Units (LTU) for registration of
services that are pan-India in nature, such as banking, insurance and
telecommunications.

Draft
Legislation

The
Central
Board of Excise and Customs (“the
CBEC”)
has
set up an exclusive directorate and is also training around 500
officers, who will further train others. These officers are involved
in preparing three draft legislations – Central GST, State GST and
Integrated GST.

As
stated by the Revenue Secretary, three different committees are
preparing the said three legislations and these committees include
senior CBEC officers, officers of department of revenue and of the
finance and taxation department of State Governments. Out of the
three committees, one has already finalised the draft, and the other
two are expected to finish by September 15.

The
Two Verticals

Two
dedicated verticals are being created to deal with policy and
implementation of the new tax regime by the CBEC. As stated by VS
Krishnan, a CBEC member, "Work
is going on full steam...Sub-groups under our officials and that from
states are working on the law and procedures... directorate
for service taxwill
make way for a directorate forGSTwith
two verticals".

The
said verticals are being set up for performance management and
taxpayer services respectively to be able to respond timely to the
GST requirements, keeping in mind the Government’s resolve of
maintaining ease of doing business. The new directorate of taxpayer
services will have the power to mandate third-party audits and
studies to ascertain the satisfaction level of key stakeholders with
tax practices so that corrective steps can be taken.

Special
Session

Shri.
Modi's reform agenda suffered a major blow on Thursday, August 13,
2015, when the lawmakers ended the Monsoon Parliament session without
approving the much awaited Constitution (122ndAmendment)
Bill, 2014 on GST (“GST
Bill”) with the Rajya Sabha
adjourning sine die.

In
the hope of making GST a reality by the set deadline, the Modi
Government is pondering over calling a Special Session of the
Parliament in the second week of September to pass the GST Bill and
is also in talks with all political parties to get the requisite 2/3
majority in Rajya Sabha where the NDA is in a minority. As per senior
Ministers, the Session is expected to be a two and a half day or
three day affair.

Congress’s
take on convening the Special Session

Even
though most of the parties are on board for the GST Bill, Congress
wants the tax rate at 18% to be incorporated into the law. The
same has been found difficult by the Government to accept as this
decision should be left to the GST Council. Also the reduction in
Centre’s weightage in the council is not agreeable.

The
Government is trying to rally support and put Congress under pressure
by arguing that, it would be in "national interest" to back
the reform to help India avoid a blowback from the Chinese crisis.

Source:
Compilation from Economic Times, The Hindu and other News Columns.